Elon Musk's xAI says it just raised $6 billion in funding, pulling in big bucks from Sequoia Capital and Saudi Arabia

• Elon Musk's OpenAI rival, xAI, says it just raised $6 billion in funding from investors.
• The AI startup is backed by VCs like Sequoia Capital and Saudi Arabia's Kingdom Holding.
• Musk said xAI's pre-money valuation was $18 billion.

Elon Musk's xAI just took a critical step in building up its war chest to take on Sam Altman's OpenAI.

The AI startup said in a blog post on Sunday that it had raised $6 billion for their Series B funding round.

The company, which is barely a year old, counts among its investors prominent VCs like Andreessen Horowitz and Sequoia Capital as well as Saudi Arabia's Kingdom Holding.

"There will be more to announce in the coming weeks," Musk said in an X post on Monday morning.

The mercurial billionaire said in a subsequent X post that xAI's pre-money valuation was $18 billion. The financial term refers to the value of a company before any equity investment is made.

Sunday's announcement marks the first time xAI has talked about its fundraising efforts. Musk had repeatedly denied earlier reports from Bloomberg and the Financial Times about xAI's outreach to investors.

The influx of funding will be essential for Musk, who has envisioned xAI as an alternative to OpenAI, a company he'd cofounded with Altman. Musk left the OpenAI board in 2018.

The ChatGPT maker was valued at $80 billion or more following a deal that allows staff to cash out their shares, The New York Times reported in February, citing people familiar with the deal.

Musk filed a lawsuit against OpenAI in February, where he accused the company of violating its nonprofit mission by partnering with Microsoft.

A year ago, Musk expressed disappointment in what OpenAI had become, saying that it was "not what I intended at all."

"OpenAI was created as an open source (which is why I named it 'Open' AI), non-profit company to serve as a counterweight to Google, but now it has become a closed source, maximum-profit company effectively controlled by Microsoft," Musk wrote on X.